Why the Economy is Interesting (and should be presented that way!)

Tomorrow I am scheduled to speak at my Siemens Toastmasters club. According to this, and I'm supposed to open with a light-hearted or amusing story. Then the rest can be about whatever I want. I am going to write about the economy and the austerity that we are facing in the near future.
In preparing this speech. I was reminded about how little we really teach about the economy. We should really pay more attention, as it affects so many matters, some as large as the numbers of jobs available, others as seemingly minute as where a toll road will be placed (or whether it should be built at all). But many of us are reduced to calling it "the dismal science," or resorting to Shaw's overused quote about how if all the economists in the world were place end-to-end.... You know the rest.
I'm not an economist, though I studied economics as part of my MBA. I tried to make it more interesting to the laypeople who will hear this speech by giving them background, such as:

• Growth in the economy of two to three percent each year was normal until the end of WWII, and then our economy took off because of post-war demand. Also, our foreign competitors were bombed out of existence. Once we got back to two to three percent growth before the actual recession of 2008, it seemed like bad times for us. But actually, that is quote normal. However when all you know is an "up" market, then skyrocketing growth looks normal to you.


• Productivity has improved to the point that we need fewer workers. Therefore, the job creation rate for American workers has fallen. As a result of fewer jobs and many bodies to do them, the wages for the average American worker has been falling since 2001. We should not expect to see higher wages in the foreseeable future. (I remember reading years ago that we possibly face a permanent underclass that cannot find work. Are we there now?)


• The prices of everyday items that we take for granted are bound to rise once we pull out of this recession. The demand for food, raw materials, fuel and water will increasingly outstrip available supplies. T. Boone Pickens, the famous oilman, is trying to buy up water rights in some areas, because he sees it as "the next oil."

Still, there is promising news on the horizon. Since the credit crunch started in late 2008, the average U.S. household savings rate has jumped from 0.7 percent to 4 percent of income. Many Americans have already relearned the value and satisfaction of saving, which is a promising trend.

Is this all learnable? I believe so. Many economists I was reading predicted this credit crunch for years before it happened. As a result, I stopped investing in my 401k's inflated stock prices and paid off my mortgage instead. The benefit has been that I have more disposable income during a rough patch in the economy. And I admit again, as I did earlier, I'm no economist.

My point is that our popular media are failing us in informing us of the economy. Our business media, where I got my information, are doing fine. Still, I don't think most people turn to those media. We need more than a crazy man on basic cable television ranting and making largely inaccurate predictions (you know I'm talking to you, Jim!). We should be demanding more.

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